Unifying the West on Climate Change

Barack Obama has called climate change one of the most important challenges of our time, is pressing forward with domestic cap-and-trade legislation, and has the US fully re-engaged in UN negotiations. But none of this means that the US and the EU will now be in harmony about how to address the problem.

WASHINGTON, DC – President Barack Obama has called climate change one of the most important challenges of our time, and is pressing forward with domestic cap-and-trade legislation while fully re-engaging the United States in United Nations negotiations.

But this changed attitude does not mean that the US and the European Union will now agree on how to tackle climate change. Despite a convergence of long-term goals – around an 80% reduction in carbon-dioxide emissions by 2050 – substantial hurdles remain, and real leadership will be required on both sides to avoid the kind of breakdown in Copenhagen that was only narrowly averted in Kyoto in 1997.

So what are the main potential sticking points?

First, it must be understood that the EU and the US start from very different points in the race to reduce emissions. When the then 15-nation EU ratified the Kyoto Protocol, it pledged to cut CO2 emissions by 8% from 1990 levels by 2012. With the US outside the Kyoto process, its emissions of greenhouse gases increased by 19% from 1990 to 2005, whereas the EU-15’s emissions rose by 8% during that period, above the Kyoto targets but well below the US total.

A closer look at the figures, however, shows that much of the EU’s performance did not result from deliberate planning. Since Kyoto’s 1990 baseline coincided with German reunification, East German emissions could be included in the EU’s initial data. British energy policy also shifted around that time, from reliance on coal to use of natural gas from the North Sea. If the United Kingdom and Germany are excluded from the 1990-2005 data, the EU-13’s emissions increased by 24%.

So the primary difference between the US and the EU was not the Kyoto Protocol or the EU’s climate policies, but external factors. The European Environment Agency still maintains that the EU will meet its 2012 target. But, to succeed, the EU will have to use reforestation and other Kyoto mechanisms, including emissions trading, which the EU originally opposed at Kyoto.

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Second, the Obama administration’s proposed emissions-reduction targets will be the high-water mark for Congress, but will fall short of the EU’s 20/20/20 pledge. Obama’s federal budget establishes a target of 14% reductions from 2005 levels by 2020, with an 83% cut by 2050 (the administration has properly chosen 2005, rather than 1990, as a baseline.) The Waxman-Markey bill that narrowly passed the House of Representatives in the summer of 2009 essentially adopts the administration’s guidelines. But the bill that finally emerges from Congress is likely to have less ambitious targets. So the US will go to Copenhagen in December with a very different set of targets from Europe, and a different baseline.

The EU must also accept that it is a Herculean political task for Congress to pass mandatory emissions-reduction legislation before the Copenhagen meeting. A solid phalanx of senators is determined to kill any mandatory climate legislation, and the global economic crisis has created the worst possible environment to add more financial burdens on companies and households. I believe that Congress will pass some kind of mandatory cap-and-trade bill, but it is more likely to happen next year, and it will probably fall even farther below EU targets than the Obama administration’s proposals.

Moreover, Obama is unlikely to accept any binding international agreement at Copenhagen that goes beyond the targets set by Congress. Nor is the administration likely to muster two-thirds support in the Senate to support a post-Kyoto Treaty without binding commitments from China and India. China already has binding domestic energy-intensity standards, but will certainly not agree to binding emissions-reduction targets. There is a real risk that a price for passing a domestic cap-and-trade bill will be potential trade sanctions on big emerging-country emitters that refuse to accept mandatory limits of some kind.

There are ways to avoid a showdown between the EU and the US at Copenhagen. Early and constant communication with Obama’s top climate officials would help the EU understand the likely US position. And coordinated EU-US efforts to persuade key developing countries like China and India to make meaningful contributions to the Copenhagen agreement are essential.

The problem is not merely one of competitiveness for European and American companies. Preventing the temperature increases that scientists tell us must be avoided to stave off catastrophe requires meaningful measures by key developing countries. The Rio Treaty in 1992 called for “common but differentiated” actions by developing nations, not inaction. While China and other developing countries may demand technology transfer from developed nations, the EU and US must insist that this not be at the expense of the loss of intellectual property.

Most importantly, each country (or in the EU’s case group of countries) should commit to meeting its own targets, and make every effort to ensure that they add up to the overall level of reductions that scientists believe is necessary to stabilize global temperatures. This contrasts with Kyoto, where the so-called “Annex I” developed countries adopted essentially identical targets. This change will prove difficult for the EU, because its companies will face a tighter set of targets than competitors in the US or elsewhere. But it may be the best we can hope for under the circumstances.

Americans’ attitudes toward climate change have been transformed under the Obama administration. But political realities will limit how far the US can go in the run-up to Copenhagen and beyond. The sooner these limitations are appreciated, the more likely it is that a meaningful post-Kyoto agreement can be achieved. Benjamin Franklin said to the American colonists, “we must hang together or surely we will hang separately.” The same applies to the US and the EU.